How Mixing Local and National Retailers is Reshaping Commercial Real Estate

Retail markets are constantly evolving to accommodate consumers’ shifting demands and values. Market research identifies a new trend redefining retail both regionally and nationwide: a sharp uptick in local, independent retailers.

Our expert real estate professionals at Diversified Partners are keeping pace with this trend, making it a priority to curate diverse blends of tenants on necessity-driven properties, with local retailers positioned directly alongside national ones.

Drawing on both organic, regional appeal and national brand loyalty, this rich variety of offerings ensures robust financial success while also enhancing communities’ profiles.

Why the rise

Many Americans increasingly shape their shopping habits around highly personal factors. Looking beyond sales price, a significant number of consumers prefer to shop locally for value-driven purposes such as:

• Supporting their local economy
• Experiencing a closer connection with store and restaurant owners
• Nostalgia for a slower-paced lifestyle

While this hasn’t diminished demand for national brands, these changing priorities present new opportunities for independent retailers to gain an economic foothold.

A healthy mix

Offering national and local retailers side by side benefits developers, consumers and local economies alike. With some shoppers craving the multitudes of product options at big-box stores, and others the neighborly service of a local mom-and-pop, a mix of both gives the best of both worlds.

National and local retailers also complement each other, driving the overall success of a shopping center. This includes benefits such as:

• National retailers attract high foot traffic that can also feed into neighboring local establishments
• Local retailers offer distinctive products and services that set a retail destination apart, enhancing its appeal

Local retailer advantages

Local retailers deliver curated services for community members, from community members. With experience-based knowledge of the local market and their neighbors’ priorities at heart, they can:

• Tailor services for consumers’ needs with a personalized approach
• Offer unique items not available at national retailers
• Recirculate higher share of revenue back into the local economy
• Create a small environmental footprint
• Enhance a supportive, tight-knit community culture

National retailer advantages

National brands deliver a different shopping experience, focusing on broader inventories and price savings, with products and services often streamlined for every market. This achieves its own set of benefits, including:

• Wide product selections, often with price savings 
• Significant contributions to property and sales taxes, supporting local schools and infrastructure 
• Large-scale job growth
• Brand recognition and trust for consumers
• Open around the clock for convenience

National retailers also provide important financial stability for a retail destination, with proven business models and ample resources to deliver reliable, long-term lease payments.

Tenant diversity in practice

To help shape retail assets for long-term success, our firm’s real estate experts apply market intelligence and relationship-driven sales-and-marketing to secure a vibrant mix of tenants for developments in high-traffic areas. 

Generating income for investors, owners and tenants, this strategic blend further addresses growing market demand for high-quality retail and restaurant experiences.

Below are completed projects and projects nearing completion that embody this approach.

The Mercy Center, Gilbert 

This premier community destination features widely popular national tenants, including Chipotle and a two-story flagship Starbucks, alongside local tenants such as Willow Midwife, Brikhouse Dental, Honoré Skin Clinic, Kolache Café and The Cabinet Design Studio.

East Gate Plaza, Phoenix

This 17-acre mixed-use destination is anchored by prominent national tenants, including a four-story Cambria Hotel and family entertainment concept Get Air Sports. It also offers additional national and local tenants such as Starbucks, Zeitouna Mediterranean, Señor Taco and Einstein Bros. Bagels.

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Achieving long-term success

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Positioning local and national retailers together allows retail destinations to thrive. More retail choices translate to higher consumer engagement, sales revenue and job growth, ensuring an asset’s success for many years to come. This not only benefits all project stakeholders, but also local markets that experience strengthened economies and enhanced quality of life.

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